As Sunpeaks Ventures Inc. continues its meteoric rise on the OTC Bulletin Board in the United States, we continue to probe behind the scenes to see what hidden hands may be work.
As I noted in my column Wednesday, Sunpeaks is America’s hottest penny stock. It started trading on March 8 and closed that day at 43 cents US. By Wednesday’s close, it had soared to $1.54. Since its debut, it has ranked among the top three value traders on the bulletin board every day save one.
It continued its relentless drive Thursday, rising another 18 cents to $1.73. Trading volume was once again heavy at 28.7 million shares. With 420.5 million shares outstanding, the company’s total stock market value now exceeds $725 million.
What’s puzzling about all this is that the company has no operating record and negligible assets. The company’s future is based on its ability to market an over-the-counter multivitamin for people on blood thinners such as Warfarin. So far, the company has announced a series of retail distribution agreements and the hiring of former NBA players and coach Paul Silas as product spokesman, but no sales.
Internet hype has been extraordinarily heavy, even by penny stock standards. According to stockpromoters.com, Sunpeaks has been promoted by 371 different tout services during the past five days alone — more than six times higher than the next highest stock.
Thursday’s hype was focused on a so-called independent analyst report setting a price target of $9 on the stock. The report was prepared by Small Cap Investment Research, based in Pompano Beach, Fla. It is a totally amateurish effort: it doesn’t even try to explain how it arrived at its price target.
The fine print at the bottom dispels any notion that this is an independent report. It explicitly states that the report is a “commercial advertisement” for which Small Cap was paid $6,000. (It doesn’t say who paid the money.)
During the course of my inquiries, I have determined that some members of the Shull family of Osoyoos have been instrumental in Sunpeaks’ development.
This concerns me, because Robert Shull and his brother Terry were criminally convicted in the United States in 2010 for manipulating the share price of a former Alberta company, Fairmont Resources Inc. (not to confused with the Vancouver company of the same name).
Robert settled a civil lawsuit filed by the SEC in the same matter by neither admitting nor denying the allegations, but agreeing to disgorge $667,770 in allegedly ill-gotten gains.
Robert is married to Patricia Shull. In a registration statement that Sunpeaks filed with the U.S. Securities and Exchange Commission in December 2009, she was reported as having voting control over a large block of seed shares that were acquired at extremely cheap prices when the company was still in its formative stages.
Then, in amended versions of the same statement, her name disappeared and was replaced by that of a Bahamian fiduciary, raising the question as to whether she had really moved out of the picture, or her name was simply being buried.
Sunpeaks has several other links to the Shulls. For starters, Sunpeaks’ name is a derivation of Sun Peaks ski resort near Kamloops, where one of the Shull’s sons, Jason, owned or leased accommodation.
More substantively, Scott Beaudette, who was initially listed as Sunpeaks’ sole director and officer as well as its controlling shareholder, is a former Osoyoos resident and longtime friend of the Shulls’ other son, Matt.
Jason and Matt Shull are well versed in junior stocks. Both previously worked as brokers at Vancouver brokerage firms that dealt heavily in junior stocks, including issues quoted on the bulletin board.
Matt also worked for a controversial Bahamian brokerage firm, Gibraltar Global Securities, which the B.C. Securities Commission is now seeking to ban from B.C. after discovering it had been dealing stock for B.C. residents without being registered to do so.
One of those clients was described as having been convicted of wire fraud and securities fraud in the United States, which appears to be a reference to Robert Shull.
I think it’s clear that Beaudette was acting as a frontman for Sunpeaks at the behest of Shull family members. He was just 26 years old at the time and had no prior experience in public companies. (He works as an accounts payable clerk with Corus Entertainment in Calgary, which appears to be the company’s only connection to that city.) When I called him to ask who actually put together the deal, he refused to comment.
Sunpeaks has several other connections to the Shulls. The company’s lawyer, Luis Carrillo of San Diego, has had a long association with Robert Shull. Among other things, Carrillo served as filing attorney for Nitro Petroleum Inc., a bulletin-board company that was ostensibly based in Oklahoma. None of the Shulls showed up as officer or directors, but according to Shane Broesky, who served on Nitro’s board, the company was “controlled solely by Jason Shull and Rob Shull.”
SEC disclosure documents also reveal that several Shull-related companies were significant shareholders of Nitro. They included Paradisus Investment Corp., whose president is Patricia Shull; Zander Investments Ltd. of Nevis, of which Robert Shull is or was a director; and 658111 B.C. Ltd. whose president is Leo Shull, father of Robert and Terry Shull. (Leo Shull was involved in Fairmont share dealings, but not charged with any wrongdoing).
With Shull family members at the helm, Nitro sold fractional interests in several dubious Oklahoma oil and gas properties to Sunpeaks. These investments became the basis upon which Sunpeaks went public, but it doesn’t appear to have ever been a serious business endeavour. Broesky, for one, believed the company was being groomed as a vehicle for some future promotion.
“Jason Shull and Rob Shull’s new [stock promotion] will be SUNPEAKS VENTURES INC.,” he wrote in a December 2010 letter. “Watch for it in the upcoming months, I assume they will be running with it soon.”
His words have proven extremely prescient.
NEXT: We track the metamorphosis of Sunpeaks from oil-and-gas investor to multivitamin purveyor.
dbaines@vancouversun.com
Blog: vancouversun.com/baines
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